A single tenant net lease investments is given to a creditworthy business or company to lease an office or building for a number of years. This type of tenant will cater for insurance premiums, property taxes, repairs and maintenance that a net lease investments agreement stipulates.
Excellent credit ratings will determine whether a company will be able to get a net lease investments or not. A single net lease investments means the tenants pay the rent plus property taxes only. Bad and good economic times are good for the single net lease investments. Triple and double net lease investments are more popular than single net lease investments.
A single tenant net lease investments can be leased for 10 years and over by one tenant. There must be return on investment for those wishing to have single tenant net lease investments and they must show this.
Most of the single net lease investments agreements are by national tenants and franchise owners. The advantage of a single tenant net lease investments is it that it provides stable and ongoing cash flow for an investor. These properties have little landlord responsibilities. A landlord may choose not to coordinate expense payments and may ask the tenant to pay the expenses directly. Regardless of the fluctuations in the market, the single tenant net lease investments will always get a return.
Due to the fact that these leases are fixed and long-term, the rates do not change with market fluctuations. The landlord will be forced to cover insurance premiums, operating expenses, and taxes if the tenant moves out due to no business. Single tenant net lease investments are suitable for those investors who want to increase their real estate portfolio. Single tenant net lease investments do not require much commitment on an investor’s time.
Net lease investments properties are attracting the attention of wealthy businessmen and individuals who want to increase their real estate portfolio. In shopping malls, you can find tenants with double net lease investments. In a double net lease investments insurance fees and taxes are divided proportionally among tenants. In a double net lease investments, the landlord issue is responsible for structural maintenance expenses.
Some of the maintenance issues that an owner may have to take care of as a result of buildings aging, includes replacing a roof, parking lot replacements, plumbing system replacements among other issues.
The double net lease investments is popular in commercial properties. Maintenance, building insurance, and property taxes are some of the expenses that are included in a triple net lease investments.
Rent charges in a triple net lease investments is lower because the tenant covers these expenses. Once a tenant’s creditworthiness is established, it will determine the lease amount taking into consideration the capitalization rates.